Home Buying in Bayonne>Question Details

Jay, Home Buyer in Bayonne, NJ

Is it against the law if a real estate agent says a property is under contract if it isn't? How do you get proof a property is under contract?

Asked by Jay, Bayonne, NJ Thu Oct 3, 2013

Help the community by answering this question:


Why do you think they agent is telling you it's under contract if it isn't? I ask because I'd be surprised if an agent turned away a potential buyer and pretend a house is sold if it isn't. After all, we want to sell homes :). To answer your question, you can find out by looking on the MLS website and doing a search of the property address. If the house is in attorney review, it usually has an asterisk * next to the A (which stands for available). Once it's under contract, its status changes to UC. The agent can sometimes be late updating the listing on the MLS that it's "under contract" but must do so promptly once the house is in fact under contract.
1 vote Thank Flag Link Sun Oct 6, 2013
I think it's a license violation to lie to the public, and the general public is not entitled to proof that a property is under contract.

So, where does that leave you? Well, Jay, there is nothing to prevent you from submitting a backup offer . . .

All the best,
0 votes Thank Flag Link Fri Oct 4, 2013
I decided to re-post my answer, both to improve on its accuracy and its language, and due to the fact I received some valid feedback that it painted the industry and a very negative light, which is not what I set out to do.

Frankly I replied in a rush. My intent was to answer the question very directly and as completely as I could. I was not concerned with anything else. Since the question had a negative focus, the answer naturally did too.

Let me start by emphasizing that it is my strong belief that the vast majority of Realtors are ethical good people. Most of the agents I encounter would take their shirts of their backs to help someone in need. Most uphold the highest standards of ethics in their practice.

But of course as in any industry, or any human endeavor, there are a few bad apples involved.
It is in that context that I intended to explain what would or would not motivate an unethical agent.

So following the long disclaimer, here is the answer:

1. If the Mr. Bad Apple is strictly a Selling Agent (representing the buyer) and not a Listing Agent (representing the seller), there would be virtually no motivation to mislead the buyer as to the status of the property. If the deal does not happen, they would not get any commission, period, end of story. Even if Mr. Bad Apple, was indeed a rotten fruit, they would have no reason to claim something was under contract if it was not. If they told a buyer so, it is with all likelihood because that was what they were told by the listing agency.

2. In the event Mr. Bad Apple is also the Listing Agent, the story is a bit different. In that case if they found a buyer on their own, they would be involved in what’s called Dual Agency. New Jersey is one of 9 remaining states that still allows dual agency, as long as there is an Informed consent to disclosure. Dual agency would allow Mr. B. Apple to receive both halves of the commission, usually split between the Listing and Selling agencies.

If our character was indeed a real rogue, straight from Breaking Bad, you can see how they could be motivated to stall potential buyers until they got one on their own. However, in this case, it is unlikely that Mr. B. Apple would claim something was under contract, while it was not, as they could not as easily reverse that to draw a buyer back if their own potential buyer was not panning out. More likely in this scenario they would just stall and delay, or ignore calls.

3. There is a third bad scenario, and that is if our despicable character intended to themselves buy their own distressed listings at a low price. In that scenario Mr. B. Apple would be benefiting from lack of real competition, so their motivation would be to deflect potential other buyers. This is the case where it may make sense for them to claim something was under contract when it was not. It is possible to track this violation of ethics by following up and checking tax records to retroactively see who has bought the property. If it is an LLC, one could follow the origination documents, filed with the state, to find out who the principle owners are.

This scenario is also the reason why distressed sellers should be weary of Realtors who offer a guaranty to purchase their property in the event it does not sell in the marketplace. There is of course nothing wrong with the guaranty on its face, but as you can see it does create an incentive for a rogue agent to resort to dishonesty.

Let me just round up again by clarifying that my answer should not be taken as an indictment of an industry, but rather an attempt by a Realtor to bring clarity and transparency to this issue out of concern for consumer rights and protection.


Amos Elroy

CDPE (Certified Distressed Property Expert)
SFR (Short-Sale Specialist Certified)
CHBA (Certified Home Buyer Advisor from NAEA)
CSBA (Certified Home Seller Advisor from NAEA)
NAEA Member (National Association of Expert Advisors)
Residential Real Estate Expert Adviser

Lic. Realtor Associate
EXIT On The Hudson Realty

(888) 462-6573 Ext. 101 / (888) HOB-NJRE Ext. 101
FAX (888) 462-6573
Office 201-437-0411
0 votes Thank Flag Link Fri Oct 4, 2013
Against the law?

I doubt it. Very, very unlikely. If that's your real question, ask a lawyer.

As the others note, it would be unethical for a real estate agent to lie. But not illegal.

How do you get proof? You don't. All the documents between a buyer and seller are confidential until the sale is concluded. You can ask for a copy of the signed sales agreement, but you won't get it.

Let's cut to the chase, though. You don't care a flying fig about the legality or illegality of an agent lying. Right? You're not even on the hunt for "proof."

What you want is to buy the property. You're being told it's already under contract, and you have your doubts about that, Well, why didn't you say that?

Here's what you do. You get your own agent--a buyer's agent. You do NOT talk to the listing agent. The listing agent represents the seller's interests, not yours. Besides, you have your doubts about the listing agent's honesty.

So you get your own agent. You make an offer through your own agent. Your agent will be far more equipped than you to determine the status of the property. Your agent can also advise you on the best strategies to follow when making an offer.

If you want the house, get an agent. If you want to ask about the law, feel free to pay a lawyer several hundred dollars for his learned advice.

Hope that helps.
0 votes Thank Flag Link Thu Oct 3, 2013
Great advice. In this market, things can change very quickly. You can call the listing agent and be told it is under contract and call back and it could be active again because the contract fell through.
Flag Fri Oct 4, 2013
You are absolutely right . I tried to inquire about a short sale property on my own and contacted the the agent/ who i think is also the owner and was told the property was under contract. I checked the century 21 website and the site was still listed for sale. I called the agent back and asked when the property was put under contract and he said"today" which made me immediately suspect. Thank You for your very harsh reply. Even though is was a little abrasive for my tastes i appreciate it
Flag Fri Oct 4, 2013
Don Tepper, Real Estate Pro in Burke, VA
Why do you believe the property is not under contract?
0 votes Thank Flag Link Thu Oct 3, 2013
The general body of law that governs the operations of such agreements is known as contract law, this exists between two legal and competent parties.
The NJ Statue of Frauds, states that a contract for sale or lease for three years or more must be in writing and signed to be enforceable.

It would be a clear violation of the code of ethics, if an agent was to mislead or delay existing business if their was not an accepted offer by both parties.

Here's what I would and have done, when time is of the essence:
I would obtain the seller's lawyer info contact the seller's lawyer to verify the status or present an offer directly to get proof, this way you will also know if the existing offer is in attorney review or if you are a back up offer and if the offer is out of attorney review.

If you have a good agent working for you he, like I would arrange an email with an attachment to the listing agent, seller's lawyer and the buyer's lawyer followed up with a fax to all explaining the following:.
"Dear Mr. or Ms. attorney,
I under their is an accepted offer on 123 Main St, please make sure our offer is considered since we do not wish for the accepted offer to go out of attorney review and would like to make sure our offer is presented to the seller. If it is out of review, you would be considered a back up offer if you wanted to keep your offer open.

Jeffrey V. Lee
Weichert, Realtors Jersey City-Exchange Place
(C) 201-218-3254 (Direct Number)
(O) 201-860-4009
(E) j.lee@weichert.com
(E) listingking01@gmail.com
(W) bundle-of-rights.com
(F) 201-860-9117
0 votes Thank Flag Link Thu Oct 3, 2013
The goal is to sell the property - it would be odd to suggest it not available if it is. Reach out to a local agent - she/he will be able to help you get to the bottom of it. There is a very real possibility that an offer has been accepted and the status not changed to a status that will eliminate the feed to the public sites. I find this a lot - in fact there is a status that accommodates this US, under contract continue to show. It will continue to show as active on the public site but an agent will be able to see if this is the case on the MLS. In this example, the property is indeed under contract.

Hope this helps some.

Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
0 votes Thank Flag Link Thu Oct 3, 2013
It's certainly not an ethical practice.. is this the listing agent of the property that expressed it is under contract? Feel free to reach out to me, I'll be happy to assist you and get to the bottom of things for you.

Sincerely, Angela
0 votes Thank Flag Link Thu Oct 3, 2013
Wouldn't it produce the perception of increased demand if a house is under contract and thus boost the price for a counter offer?
Flag Tue Oct 27, 2015
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